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What Happens to 500 Billion Electronic Internet “Things”?

January 2017

Introduction

Much attention has been paid to the “Internet” part of the Internet of Things (IoT). Concerns about privacy and cybersecurity have been paramount because of increased opportunities for surveillance and data gathering. Less focus has been paid to the “things” that make up the IoT.

There may be as many as 500 billion of these “things” by 2030. And the electronics industry should keep in mind that, while many regulators are looking at security issues related to IoT devices at “end of life,” others may see IoT as an environmental challenge as well.

As electronic devices have proliferated, many states have passed e-waste product stewardship laws. These typically place on “manufacturers” of electronic devices the obligation to ensure that the devices are properly managed at their end of life and, where feasible, diverted from the waste stream for recycling, reclamation, or reuse.

We should not expect responses to the growing IoT to be any different. IoT manufacturers, distributors, and retailers thus should consider how to approach likely state and federal interest in expanding current end-of-life e-waste product stewardship laws to encompass a wider range of IoT products.

What are Product Stewardship Statutes?

E-waste product stewardship statutes exist in 25 states and the District of Columbia. They govern a wide range of electronic devices, including many devices that have network connectivity. The principle behind them typically is that manufacturers and others involved in the supply, distribution, and use of such products should to some degree be held responsible for ensuring that the products are managed responsibly at the end of their useful life, rather than be allowed to shift that responsibility to local and state waste management authorities.

The concerns driving state e-waste product stewardship laws are threefold: (1) potential environmental harms caused by release of electronic device materials into the environment; (2) the potential commercial value of e-waste upon recovery, recycling, and reuse of valuable commodities; and (3) landfill capacity issues and municipal waste handling costs created by disposed of electronic devices that are bulky and difficult to handle. Many would argue that the third has become predominant.

How will E-Waste Statues Affect IoT?

Each concern identified for e-waste generally is potentially applicable to IoT devices.

First, IoT products are manufactured from the same potentially hazardous materials or rare commodities as many non-networked electronic devices, so the environmental concerns behind existing e-waste legislation may lead some to call for expanding the coverage of their e-waste laws to include more IoT products.

Second, as with many other electronic devices, IoT devices likely contain commodities that have commercial value. Such commodities may be difficult to recover, but as the number of IoT devices proliferates, the demand for such commodities may increase to a degree that supports innovation and improvement in recycling and recovery technology.

Finally, landfill and solid waste collection and processing concerns may drive states to aggressive regulation of IoT devices as the devices proliferate among consumers and businesses alike. Such concerns, along with human health and safety concerns, drove states to implement product stewardship laws for bulky cathode-ray tube (CRT) televisions and monitors beginning in the 2000s. Those laws have since expanded to cover many other products. Because the size of IoT products can vary widely, from tiny microchips to data centers “wired electronics and otherwise for the Internet,” the capacity and handling concerns for these products at the end of their useful life could be especially acute as volumes rise.

In addition, as a wider variety of material components enter the e-waste stream, the complexity of sorting processes necessary to deal with them will likely increase. This will in turn increase management costs and burdens on state and local governments and those businesses already subject to mandates to collect and handle other products, who likely will be receiving some volume of these materials along with whatever they are obligated to collect. Some of them may press for expanding the base of companies paying for stewardship services.

In sum, not all of the interesting regulatory concerns related to IoT are “in the cloud.” Manufacturers, distributors, and retailers of IoT technology should keep an eye on how the proliferation of IoT technology affects regulators’ concerns about what happens when the products that support IoT connectivity are no longer being used.

SIGNAL Group (formerly McBee Strategic Consulting, LLC) is a wholly owned subsidiary of Wiley Rein. SIGNAL is a total solutions provider—advocacy, strategic communications, research, and digital media—for clients seeking to engage the federal government to achieve competitive advantage, influence public policy, establish new markets, and secure public capital.